China weighs cut of about 2.5% in 2023 crude steel output: sources

CHINA is considering cutting its crude steel output by about 2.5 per cent this year, said two sources familiar with the matter, as it extends a two-year-old policy to curb emissions by the world’s largest steel sector.

The target was proposed by policymakers at a meeting last week but has not yet been finalised, said the sources, who attended the meeting but sought anonymity, as they were not authorised to speak to media.

State planner the National Development and Reform Commission (NDRC) did not immediately respond to a request for comment.

Some officials at last week’s meeting said a cut of 2.5 per cent was too high as the economy was still recovering, the sources said, adding that the target was expected to be set before the end of June.

China’s steel production plans are closely watched by the world’s iron ore miners, who ship about 1 billion tonnes of the steelmaking raw material to the country each year.

Iron ore prices have rallied in recent months on expectations of strong demand from a recovering Chinese economy, though the state planner is trying to tackle what it says is a speculation-fuelled rally.

China adopted controls on crude steel output in 2021 after pledging to reach peak carbon dioxide emissions by 2030 and achieve carbon neutrality by 2060.

Industry discussion in recent weeks has focused on whether China would continue the policy this year, with Beijing keen to support economic growth after last year’s tough Covid measures led to the slowest growth in nearly half a century.

Last week, Bloomberg reported that China would continue to curb output this year.

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China produced 1.018 billion tonnes of steel last year, down 1.7 per cent from the prior year, official data show. In 2021, output fell 3 per cent from a record 1.065 billion tonnes the year before.

Last year the NDRC confirmed in April that it would curb steel output that year. REUTERS